DraftKings jumped last month when the ARK Next Generation Internet ETF disclosed purchases.
Gabby Jones/Bloomberg
DraftKings stock jumped Wednesday afternoon after analysts reacted to the prior day’s investor presentation and Cathie Wood’s ARK Innovation exchange-traded fund added shares.
Shares were up 11% to $69.22, while the S&P 500 index was up 0.9%.
On Tuesday, DraftKings (ticker: DKNG) raised its long-term targets for revenue and earnings before interest, taxes, depreciation, and amortization. Likewise, a handful of analysts raised their price targets for shares.
On Wednesday, the ARK Innovation ETF (ARKK) added 949,200 shares, bringing its holdings to about 1.7 million, or 0.5% of the ETF. The stock jumped at the start of last month when the ARK Next Generation Internet ETF (ARKW) disclosed DraftKings purchases.
Jefferies analyst David Katz raised his price target to $75 from $73 in a note Wednesday. He has a Buy rating on the stock.
“The information from the analyst meeting supports the continued strength andproliferation of digital gaming and the positive context for DKNG, including Mgt.’s discussion of its spending efficiencies, customer retention and cross-selling capabilities,” he wrote.
Credit Suisse analyst Benjamin Chaiken raised his price target by a dollar, to $85. He notes that in states that allow both online sports betting and iGaming, or online casino games, the company said 57% of online sports betting users placed a bet via its iGaming offering. Meanwhile, about 60% of daily fantasy sports players tried online sports betting or iGaming during the first 12 to 18 months of a state’s launch.
Chaiken thinks that supports the idea that entry-level products like daily fantasy sports give DraftKings an advantage over betting-focused peers in new markets. He also believes the different offerings can help drive retention.
Benchmark analyst Mike Hickey upped his target to $75 from $69, maintaining a Buy rating. He said the company’s total addressable market, market share, and long-term growth profile continue to exceed his expectations.
“We anticipate product innovations including in-game betting will accelerate success in player engagement, retention, and monetization,” he wrote. “We anticipate DKNG will dominate the market in North America and will find long term success overseas.”
Cowen analyst Stephen Glagola upped his target to $70 from $60 but maintained a Market Perform rating.
“We remain Market Perform as we believe valuation does not present a compelling risk/reward against intermediate term risks,” Glagola wrote.
Write to Connor Smith at [email protected]
